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BACKGROUND
Geographical Location
Cyprus is situated at Middle East, island in the Mediterranean Sea, south of Turkey. It covers an area of 9.251
square kilometres and lies 65 kilometres south of Turkey, 96 kilometres west of Syria, 385 kilometres north of
Egypt and some 980 kilometres south-east of Athens.
The principal topographical features of Cyprus are the two mountain ranges running along the centre and north-east
of the island, separated by a wide and fertile plain.
Climate: temperate, Mediterranean with hot, dry summers and cool, wet winters
Population
The population of Cyprus is about 754,064 (July 1999 est.). Greek Cypriots form the largest ethnic community
representing approximately 82%. Turkish Cypriots comprise the second largest community representing 18%.
Political Structure
Cyprus became an independent republic in 1960. The political system is modelled on western democracies in which
individual rights are respected and private enterprise is given every opportunity to develop. Under its Constitution,
Cyprus has a presidential system of Government. The President is the Head of State and is elected for a five-year
term of office.
The executive arm of the Government is the Council of Ministers and the members are appointed by the President.
The Ministers are responsible for the administration of all matters falling within the domain of their ministries
and for the implementation of legislation. Legislative power is in the hands of the House of Representatives, which
consists of 56 elected members who hold office for a period of five years. A multi-party system operates in Cyprus
and the electoral system is based on proportional representation.
The legal system is based on the same principles applicable in the United Kingdom and all statutes regulating
business matters and procedure are based essentially on English Law. Most laws are officially translated into English.
Criminal jurisdiction rests in six district courts for minor offences and in six assize courts for more serious
crimes. All appeals are heard by the Supreme Court which pronounces final judgement.
Infrastructure and Economy
Larnaca International Airport replaced Nicosia as the main International airport in 1975 and a second, smaller
International airport near paphos became operational in late 1985. There are frequent air connections to many International
destinations
The major port facilities are those of Limassol and Larnaca, situated along the south coast of the island. They
are multi-purpose ports serving containerised bulk and groupage cargo for both Cypriot-origin and transit trades.
There are also port facilities at Paphos and some oil and mineral terminals. All ports in Cyprus come under the
Cyprus Ports Authority. There are a number of regular passenger services with neighbouring countries, especially
in the summer.
The network of roads, most of which are asphalted two-lane carriageways, provides for internal transport within
the island. A modern four-lane motorway links Nicosia to Limassol and a similar motorway links the Nicosia-Limassol
road to Larnaca International Airport.
Cyprus has good telecommunication links with the rest of the world. Over one hundred countries can be reached
on a direct dialling system from any telephone on the island and there are good postal and courier services.
The economy of Cyprus is based on a free enterprise system. The Government's role is limited to regulation,
planning and the provision of public utilities. During the last ten years, the economy of Cyprus has demonstrated
spectacular growth and its currency has enjoyed relative stability.
Agriculture, whilst important, is no longer the principal source of income for the economy, although it remains
the largest employer. Manufacturing represents the largest proportion of the gross national product and the progress
of the service sector has exceeded expectation. Tourism also provides an important source of foreign exchange.
The estimated annual per capita income is about U.S.$4,500, although certain economists suggest that this is
an underestimate.
Language
Greek and Turkish are the official languages of Cyprus (Turkish being used only in the occupied north part
of Cyprus). English is widely spoken and understood, particularly in commercial and Government sectors.
Currency
Cypriot pounds. 1 Cypriot pound = U.S.$2.60.
Exchange Control
Yes, but does not apply to offshore companies.
Type of Law
Civil code with many English Common Law influences.
Principal Corporate Legislation
Companies Law, Cap. 113, as amended.
KEY FEATURES TABLE
| General |
| Political Stability |
Good |
| British Based Legal System |
Yes |
| Type of Company |
Offshore |
| Disclosure of Beneficial Owner |
Yes |
| Migration of Domicile Permitted |
No |
| Tax on Offshore Profits |
4.25% |
| Non-English Language Names Allowed |
Yes |
| Corporate Requirements |
| Minimum Number of Shareholders |
Two |
| Minimum Number of Directors |
One |
| Bearer Shares Allowed |
Yes |
| Corporate Directors Permitted |
Yes |
| Secretary Required |
Yes |
| Standard Authorised Share Capital |
C£10,000
($26,000) |
| Local Requirements |
| Registered Office/Agent |
Yes |
| Company Secretary |
No |
| Local Directors |
No |
| Local Meetings |
No |
| Government Register of Directors |
Yes |
| Government Register of Shareholders |
Yes |
| Annual Requirements |
| Annual Return |
Yes |
| Audited Accounts |
Yes |
| Recurring Government Costs |
| Annual Tax/Licence Fee |
Nil |
| Annual Return Filing Fee |
Nil |
COMPANY FORMATION
Type of Company for International Trade and Investment
Companies incorporated under the Companies Law, Cap 113, as amended, who have obtained Exchange Control permission
from the Central Bank of Cyprus to acquire offshore company status.
Procedure to Incorporate
By submission of the Memorandum and Articles of Association to the Registrar of Companies, together with a
Declaration of Compliance and the appropriate registration fee.
Restrictions on Trading
Cannot undertake the business of Banking or Insurance and cannot trade with resident individuals or companies
situated in Cyprus.
Powers of Company
Cannot undertake any business that is not contained in the company's object clauses.
Language of Legislation and Corporate Documents
English.
Shelf Companies Available
Yes.
Time Scale to Incorporate
Approximately 1 week, subject to name approval.
Name Restrictions
Any word that the Registrar considers undesirable. Any name that is identical or similar to an existing
company. Any name that implies illegal activity or implies Royal or Government patronage.
Language of Name
Names may be expressed in any language using the Latin alphabet provided that the Registrar is in receipt of
a Greek or English translation and the name is not considered undesirable.
Names Requiring Consent or a Licence
"Bank", "Trust", "Building Society", "Insurance", "Assurance",
"Re-Insurance", their foreign language equivalents or any name that the Registrar considers may have
a connection with the aforementioned.
Suffixes to Denote Limited Liability
Limited or Ltd.
Disclosure of Beneficial Ownership to Authorities
Yes, upon incorporation and thereafter if beneficial ownership changes.
SHARE CAPITAL, TAXATION, LICENCE FEES AND COMPLIANCE MATTERS
Authorised Share Capital
Must be in Cyprus pounds. The minimum authorised share capital of a Cyprus offshore company is CY£1,000
($2,600). For companies wishing to establish a physical presence in Cyprus the minimum is CY£10,000 ($26,000).
Classes of Shares Permitted
- Registered Shares of par value.
- Preference Shares.
- Redeemable Shares.
- Shares with no voting rights
Bearer Shares Permitted
Not permitted.
Taxation
By virtue of special provisions in the Cyprus Income Tax Laws, the net chargeable profits of Cyprus Offshore
Companies are taxed at a rate of 4.25%.
Double Taxation Agreements
Cyprus has an extensive double taxation treaty network, to include:
- Austria
- Ireland
- Bulgaria
- Italy
- Canada
- Kuwait
- People's Republic of China
- Malta
- CIS
- Norway
- Czech and Slovak Republics
- Poland
- Denmark
- Romania
- France
- Sweden
- Germany
- United Kingdom
- Greece
- United States
- Hungary
- Yugoslavia
Licence Fees
Not applicable.
Financial Statement Requirements
Audited financial statements have to be submitted to the Cyprus Taxation Authority annually.
STRUCTURE OF MANAGEMENT
DIRECTORS
Minimum number of Directors
One
COMPANY SECRETARY
Company Secretary Required
Yes
SHAREHOLDERS
Minimum number of Shareholders
Two.
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